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Individualisation 2.0 l The work landscape of the future

The average German employee works 38.25 hours per week with 30 days of paid holiday. His overtime adds up to 43 hours per year and he receives eleven emails per day. Most intriguing about this overview of averages is not so much the surprisingly low number of emails, but rather the fact that it says so little overall about the landscape of work both today and in the future, because the Joe Bloggs of workers is gradually shifting from the rule to the exception. According to socio-economic panels, less than 40 percent of the workforce has permanent, full-time positions in Germany today. “Atypical work”, comprising fixed-term, casual and part-time jobs, has risen by more than 50 percent since the mid-1990s. The number of self-employed people, which was constantly decreasing up until the 1970s, has been rising again since the 1980s and is now slightly over 10 percent. Growth drivers are the “new independents”, which differ from the classic self-employed professions such as lawyers or dentists and include numerous solo freelancers in service industries and the creative economy. These now make up more than half of all self-employed workers.

In the 20th century individualization, which is still the dominant social trend, extended predominantly to the fields of consumerism and leisure, while the world of work was still shaped by industrial bottlenecks. Anyone wanting to escape from the narrow standard bracket of the “organization man” was on the periphery and took a significant risk. With the reorientation towards independence, freelance occupation and entrepreneurship, individualization is now also reaching the world of work. In line with the fragmentation of lifestyles, a new pluralism of work forms and styles is emerging, sometimes forcibly and determined by others, sometimes through the individual’s own choice, based on a profound need for autonomy and self-realization.

War for Talents: Winners and Losers

The metamorphosis from industrial to post-industrial society is leading to a split between the insiders and the outsiders of the global job market. With the laudable exception of Germany, in many countries the financial crisis has heightened a structural crisis, which is particularly affecting newcomers to the job market and their future prospects. A lack of job prospects was the driving force behind the most recent rioting by young people in North Africa, London and Spain.

The McKinsey Global Institute provides a handy explanation, in which it divides work into three categories, namely “transformational” (all physical production processes), “transactional” (routine jobs in call centers and authorities) and “interactional” (demanding, knowledge-based and hard-to-standardize activities like management and consultancy). While transformational and increasingly also transactional work is being automated or outsourced to low-wage locations, interactional work is developing ever greater productivity leverage and is being remunerated accordingly. In the insider segment, therefore, there is a shift of power towards the sought-after experts, in line with the old economic adage: the short side of the market prevails. The battle for these qualified minds is already raging and will only intensify with demographic change.

In contrast, the “somebodies”, as Charles Handy once christened them, whom we know from the phrase “somebody’s got to do it”, find themselves in a precarious situation. This affects most significantly (but for a long time now not only) the lower and poorly qualified strata. The “deal” of the entire post-War period, whereby people were happy to sacrifice their autonomy in favor of future security and a planable career – “loyalty for security” – has been renounced by employers, with globalization cited as the cause. Sociologist Heinz Bude points to the fact that now, in every milieu, from the under-privileged to the managerial class, there is a certain proportion in a “precarious” position, at risk of sliding down the scale: “Thus the inconstant, yet unequivocal line of the social divide stretches through our society. On the one hand, there are those who embody social change and set the pace, whilst on the other there are those who are left behind and cannot keep up with the rhythm.”

The good news is that the division of labor within society will increase further, and even those in precarious positions will see new jobs – or at least work – emerging at the upper end of Maslow’s hierarchy of need, where we find wellbeing, meaningfulness and social exchange. Jeremy Rifkin prophesizes in his latest book “The Third Industrial Revolution”: “On our way to the middle of the century, trade will increasingly be controlled by intelligent machines, which will free up a large proportion of people to create social capital in the non-profit civil society, which will develop into the dominant sector in the second half of the century.”

Wikinomics: Mass self-empowerment

Technological progress opens up another outlet for new niches in the world of work. This permits new ways of working, business models and market niches, beyond the critical bottlenecks of the Industrial Age, and these play into the hands of individuals and small business and are thus reminiscent of the era of manufacturing. As Daniel Pink put it in his American freelancer bible “Free Agent Nation”: “Today the means of production have once again reached pre-industrial levels. The tools of the ideas economy are widespread, cheap and compartmentalized, and can be operated by one person.” Or put more succinctly: “Technology is taking the capital out of capitalism.”

Ronald Coase’s argument about why there are even hierarchical firms in the first place and everything is not left to the market, with transaction costs balancing resources, collapses in view of digital technologies. Wikipedia and various open-source projects like Linux or Firefox have shown that digital mass collaboration can deliver thoroughly usable results. The greatest upheaval in the area of the economy thus consists of the subtle conversion of organization from hierarchy to network. A number of authors have pointed out this paradigm shift and tried to express in words the resulting new relationships: “Mass innovation instead of mass production” says Charles Leadbeater, and Clay Shirky refers to “the power of organizing without organizations”.

For Don Tapscott, enthusiastic advocate of mass collaboration, the days of big corporate organizations are already numbered: “We are seeing a new form of self-organization that I call Wikinomics, and it will supersede conventional corporate structures as the primary driving force of value creation”, he writes in “Wikinomics”. Tapscott, together with Anthony D. Williams, has just released an update to his idea. In “Macrowikinomics” he propagates the expansion of the idea of spontaneously emerging collaboration across all sections of society. Even if the thinking is a little naïve, it is clear that the shift from hierarchy to network will not only change the structure of the economy, but also the big organizations, if they want to survive.

Projectification: The protean company

As things stand, even in companies in the qualified segment, routine activities are constantly decreasing or are being outsourced or automated. Projectification means that the proportion of time-critical tasks in unmarked areas is growing and management of the exceptional case is increasingly becoming the norm. Forms of work and organization such as film teams, theater ensembles or mountain expeditions are becoming the model for ever more elements of value creation. As a consequence, companies’ limitations are becoming more porous. New value creation networks are being created, for example with suppliers. Deutsche Bank Research estimates: “By 2020 limited-time, cooperative value creation will account for around 15 percent of overall value creation.” Measured by the extent of work, however, in many industries the figure has long been over 30 percent.

Charles Handy anticipated this over 20 years ago and called his vision “shamrock organization”, since it takes the form of a three-leaf clover, consisting of a highly motivated team of core managers, the traditional workforce, which is rewarded with high standards of employment, and a loose cloud of highly qualified freelancers, who form the wider ecosystem. Today this three-leaf-clover organization has long been a reality, as “Der Spiegel” noted in March 2010: “Within companies a three-class society is taking hold: There is the permanent workforce with the managers and important staff members; there are external specialists brought in for specific projects; and finally there are flexible workers who are taken on and let go as the workload dictates.”

The future vector points clearly towards a further melting away of the core workforce, without it disappearing completely. Yet the roles and requirements of the “corporate high-flyer” are changing, as Tapscott and Williams explain in “Wikinomics”: “Companies will have to identify those managers within their organization who are in a position to orchestrate an amorphous network of contributing workers. All the others will “plug the gaps”, contribute their value added and then break off to work on other projects.”

Even Michael Malone, who was propagating the idea of the entirely virtual firm even in the 1990s, sees things as more nuanced today and proposes the “protean corporation” as a model for the future in his latest book “The Future Arrived Yesterday”. This protean company, which is unbelievably adaptable, yet remains self-identical at its core, consists of three parts, namely the “core”, “inner ring” and “cloud”, a swirling cloud that surrounds the center and represents exchange with the environment. Here Malone points explicitly to the fact that the 20 percent who continue to want security and stability form an important resource for the corporate culture, the institutional memory and the integrity of the firm, and thus ensure its long-term survival.

This fits in with the ideas that architectural theorist Friedrich von Borries recently expressed in “Monopol” magazine about the newly planned Apple headquarters in Cupertino: “Why does a global corporation like Apple even need headquarters? Why does the infrastructure of a company like that not function like the iCloud itself – with location-independent individuals allowing their work output to flow into a virtual pool? Why, in a time when its products are dematerializing, does a company still need a physical location, let alone one with architecture so charged with significance? Perhaps – and this is the paradox – it is precisely because of the increasing dematerialization. The world as a cloud needs some kind of anchor, and for Apple this appears to be the new campus.” The work landscape of the future will be more compartmentalized, more colorful and more versatile. Yet it will also show focal points in which the brand core of a corporate culture shaped by leadership will mark the difference between inside and outside.